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California’s High Court Hears Major Pension Dispute. Where Are the Justices Headed?

Mon, 12/17/2018

We’re nearly two weeks into a legal case that could have enormous implications for California’s future.

The California Supreme Court began hearing oral arguments on Dec. 6 in the case of Cal Fire Local 2881 et al. v. California Public Employees’ Retirement System et al. The issue being debated is the status of “airtime,” which allowed public employees to purchase extra years of service to boost their pension benefits before it was eliminated by the 2012 pension reform law. But the case could open the door to a larger ruling on the constitutionality of the so-called “California rule,” an ethos courts have held since the 1950s barring the reduction of public benefits promised at hire without equivalent compensation.

Critics say the California rule has prevented the sorts of reforms and negotiations necessary to make a real dent in California’s pension crunch. As a result, many local governments have been pushed to the brink of insolvency. An increasing number are turning to taxpayers to help foot the rising bill. State and local pension debt is now at $1.013 trillion — equivalent to $78,265 per household — according to calculations from the Stanford Institute for Economic Policy Research.

A broader ruling on vested pension rights would be nothing short of monumental, opening the door to the freezing or renegotiation of existing state and local benefits. But it appears likely the Court could push the issue further down the road. Questions by the justices so far indicate they may be headed for a narrower ruling on whether airtime even qualifies under the rule.

If the Court punts, the issue is sure to way make its way back at a later date. As CalMatters’ Dan Walters notes, airtime is just one of the issues that has renewed the debate over vested public pension benefits at the appellate court level.

The Supreme Court is expected to issue a ruling in the airtime case by mid-March.